- Listing of Securities
- Corporate Governance
- Trading of Securities
- Clearing and Settlement
- Information Services and Safety
- Market Surveillance
- TWSE Securities Borrowing and Lending System
- Internationalization of Securities Market
- Supervision and Service to Securities Firms
- Investors Service
- Securities Information
- Rules and Regulations Directory
Listing of SecuritiesUpdate Date：2023/10
In order to qualify for an initial public offering (IPO) on the Taiwan Stock Exchange (TWSE), domestic public companies or foreign issuers that have not listed their shares on any other stock exchange have to meet certain financial and operational criteria. The IPO filing process begins when the company submits an IPO filing application to the TWSE, where the application is reviewed by the managerial department before being sent to the Securities Listing Review Committee for consideration. If approved, the application will then need to be ratified by the TWSE Board of Directors, which enables the TWSE and the applicant company to enter into an official listing contract. It is then filed and recorded with the Financial Supervisory Commission (FSC). Applications for a secondary listing filed by foreign listed companies are submitted and reviewed by the managerial department. After the TWSE and the foreign applicant company enter into an official listing contract, it is filed with the FSC. Once listed, the company must comply with listing requirements such as the filing of quarterly financial reports and payment of listing fees. The company should also disclose material information promptly and make sure the content is accurate and complete.
At the same time, the TWSE has focused on expanding its listed product offering by providing investors with a growing array of investment and hedging tools. TWSE-listed securities currently include stocks, convertible bonds, beneficial certificates, call (put) warrants, ETFs, ETNs, Taiwan Depository Receipts (TDRs), beneficiary securities (REITs), etc.
Listing applications of call warrants began to be accepted from 1997. With the increasing demand for various investments and hedging, the underlying assets allowed to track has gradually expanded. The domestic indices, equities, ETFs, TDRs, foreign indices, foreign equities and futures warrants have been accepted to issue. The TWSE launched REITs in 2005.
The first index-based Exchange Traded Product (ETP), namely an Exchange Traded Fund (ETF), was introduced in 2003. Now we have ETFs not only covering a variety of asset classes – namely equity, bond, currency, and commodity, but also different strategies – including FX, volatility, leveraged & inverse and Smart Beta. These have provided investors with efficient and adaptable tools to diversify risk and reap profits. Recently, the TWSE launched ETFs tracking ESG, 5G, artificial intelligence and robotics that help investors grasp the latest investment trends with indexed commodities and bring new momentum to the securities market. Moreover, the TWSE introduced ETNs in 2019. Now we have domestic and foreign equity, leveraged & inverse ETNs. The TWSE will continue to develop diversified and strategical ETNs in the future.
Taiwan’s equity market has developed multi-layered and full-fledged. In order to orientate with international capital markets and government’s policies, the Taiwan Stock Exchange is launching a new trading platform to make it easier for innovative enterprises, which have limited capital or incur losses due to needed capital injection, but have promising outlooks to raise funds for expansion and list on the "Taiwan Innovation Board ('TIB')." The Taiwan Innovation Board features listing requirements based on market cap for innovative companies. Due to the fact that most innovative businesses are still in early-stage development and therefore pose a higher investment risk, participation is limited to qualified investors to both support innovative companies and safeguard the investing public. Eligible participants include professional institutional investors, juristic persons or funds that meet specific requirements, and accredited individual investors. Participants exclusively to qualified investors will achieve TIB listed companies’ fair value.
Corporate GovernanceUpdate Date：2023/10
Taiwan has been educating public companies on the importance of corporate governance since 1998. The Executive Yuan formed the "Corporate Governance Reform Task Force" on January 7, 2003 to study various issues of corporate governance for drafting the "Accountability of Companies in Taiwan: Policy Agenda and Action Plan to Strengthen Corporate Governance," which then became the basis of promoting corporate governance. Under those action plans, Taiwan’s government has promoted and implemented various policies, including significant amendments made in 2005 to the Company Act regarding shareholder proposal rights, board nominations, and e-voting, as well as amendments made in 2006 to the Securities Exchange Act relating to independent directors and audit committees. The Financial Supervisory Commission launched the Corporate Governance Roadmap in 2013, which proposed thirteen action plans executed according to plan to achieve five goals by 2017. The Financial Supervisory Commission extended the plan "Corporate Governance Roadmap (2018~2020)" to keep developing corporate governance in Taiwan and lead corporate governance to be aligned with international standards, five action plans are proposed as follows: deepening corporate governance and CSR culture, enhancing board functions, promoting shareholder activism, strengthening information transparency, and augmenting regulatory enforcement. The Financial Supervisory Commission further launched "Corporate Governance 3.0 - Sustainable Development Roadmap" on August 2020 which centered on the following five action plans: "Strengthen duties and functions of boards to enhance the sustainable value of enterprises," "Enhance information transparency and promote sustainable operations," "Strengthen communication with stakeholders and create effective interaction channels," "Encourage stewardship and align with international norms," and "Deepen a corporate culture of sustainable governance and provide diversified products."
Based on the "Sustainable Development Guidemap for TWSE- and TPEx-Listed Companies" and the "Corporate Governance Roadmap," the FSC continues to encourage enterprises to actively practice sustainable development by planning an action plan to promote the sustainable development of the enterprise along the five key dimensions of "Lead listed companies to reach net-zero," "Deepen companies’ sustainable governance culture," "Enhance the disclosure of sustainable information," "trengthen communication with stakeholders," and "Establishing ESG evaluation and ESG digitalization."
In tandem with the launch of the CG Roadmap, the Corporate Governance Center was established at the TWSE in October 2013 to standardize corporate governance measures in Taiwan. Beginning in 2014, the Center began the annual Corporate Governance Evaluation System which aims to enhance the corporate governance practices of listed companies. In the same year, the Center also launched its official website (https://cgc.twse.com.tw/frontEN/index) in English and Mandarin as well as its first e-newsletter, featuring an integrated information resource platform for all matters related to corporate governance and corporate social responsibility (CSR) in Taiwan and globally. Starting in 2015, the Center mandates companies fitting certain criteria to submit a Corporate Social Responsibility Report as part of their annual material information disclosure. In 2016, the TWSE established the Stewardship Principles for Institutional Investors, which encourages them to abide by the commitments of the Principles and to monitor investee companies. The TWSE continues to amend relevant corporate governance regulations, conduct promotional and educational events, and strengthen international ties.
Trading of SecuritiesUpdate Date：2023/10
When the TWSE was first established, trading in the centralized market place was carried out on an open trading floor. However, to meet the changing needs of the market environment, the trading system has progressed through several phases. In August 1985, the open trading floor was gradually replaced by a computer-aided trading system (CATS), which was eventually upgraded to a fully automated securities trading (FAST) system in November 1993. In March 2020, continuous trading mechanism was implemented to further upgrade the trading system. The automated trading system has boosted the trading capacity and efficiency of the stock market.
The trading hours of the centralized market trading session are as follows:
|Trading Sessions||Order Placing Hours||Trading Hours|
|1. Regular Trading||8:30-13:30||9:00-13:30|
|2. Intraday Odd-lot Trading||9:00-13:30||9:10-13:30|
|3. After-hours Fixed Price Trading||14:00-14:30||14:30|
|4. After-hours Odd-lot Trading||13:40-14:30||14:30|
|5. Block Trading||Non-paired Trade||9:00-17:00||9:00-17:00|
|6. Auction||15:00-16:00||After 16:00|
|7. Tender Offer||15:00-16:00||After 16:00|
Investors can place orders in person, by phone, or internet. Orders are entered via terminals on securities firms’ premises into TWSE’s main computer and are processed and executed by the trading system using a price-time priority precedence hierarchy. In special cases, listed stocks may be traded through negotiation, auction, tender offer, or other means.
The trading in TWSE adopts the continuous trading throughout the trading hours with the call auction at the market open and close. The “intra-day price stabilization” mechanism is adopted to prevent over-volatility of stock prices. Whenever the trading system detects that the potential execution price of a security may fall out of a specified range (+/-3.5%) of the reference price, the security matching is postponed for 2 minutes. Meanwhile, order placing, cancelling, and volume amendment of limit order (ROD) are still accepted during the postponed time interval; thereafter, securities trading is resumed by call auction. The TWSE discloses the five best bid and ask prices/volume of unexecuted orders immediately after the matching on a real-time basis and “5-second snapshot”. Information of simulated transaction prices, simulated trading volumes, and simulated best five reported bid/ask prices and volumes will be disclosed during opening and closing session and the intra-day stabilization period. This allows market participants to make an informed judgment when placing orders.
In addition, investors can trade through an omnibus trading account. Once the transaction is made, securities firms submit a Post Allocation Transaction Statement to TWSE, after which the trades are settled individually in each investor’s sub-account. For more details, please visit this website > Products & Services > Trading System.
Clearing and SettlementUpdate Date：2023/10
According to the Securities and Exchange Act, Operating Rules of the Taiwan Stock Exchange, and Criteria Governing Handling of Stock Affairs by Public Companies, the TWSE acts as a clearinghouse for all the trades executed in the market. All securities firms have to fulfill settlement obligations to the TWSE, which acts as the Central Counter Party (CCP) and gives settlement guarantees to all the trades in the market.
The TWSE implements a same-day clearing method and employs a multilateral net settlement to calculate the net amounts of shares and funds receivables and payables between securities firms and the TWSE. The settlement cycle is T+2.
The TWSE adopts a Daily Net Settlement System (DNS), through which settlement obligations of securities firms have to be fulfilled on settlement day and cannot be deferred to the next business day. A securities shortfall can be covered by applying to use the TWSE’s Settlement Coverage Securities Borrowing System, which requires a collateral deposit and charges a borrowing fee to the borrowing securities firm. If a sufficient amount of securities cannot be borrowed to cover the shortfall, the buying securities firm will get due bills issued by the TWSE as temporary coverage and the selling securities firm has to purchase shares for the buying securities firm as soon as possible.
Settlement of securities in the form of book-entry is operated by the Taiwan Depository and Clearing Corporation (TDCC), the Central Securities Depository (CSD) in Taiwan, and entrusted by the TWSE. Settlement of funds in NTD is conducted through the CBC Interbank Funds Transfer System (CIFS) of the Central Bank, which acts as the settlement bank of the securities market. Settlement in foreign currencies is conducted through Cathay United Commercial Bank.
When a securities firm defaults, another securities firm will be designated by the TWSE to complete settlement on behalf of the defaulted firm and to liquidate the defaulted positions in the market. Losses and expenses incurred will be initially covered by the Joint Settlement Clearing Fund (JCSF) contributed to by the defaulted securities firm, then the First Special Clearing Fund (SCF) contributed to by the TWSE, followed by the Second SCF and the JCSF contributed to by the other securities firms, shared jointly pro rata. Afterwards, the TWSE shall pursue the recovery of funds from the defaulted securities firm. If the firm fails to refill its JCSF share within the deadline required by TWSE, the TWSE will halt its market trading.
Information Services and SafetyUpdate Date：2023/10
As Taiwan’s premiere trading venue for the securities market, the TWSE is obliged to create a fair, orderly, and efficient market. Our mission is: maintaining the order of the market place, enforcing investor protection, and pursuing better quality of service. Moreover, two back-up sites, one for regional and another for remote, have been established to guard against possible disasters. The TWSE has implemented a number of information management systems. The TWSE acquired the ISO 9001 Quality Management system certification in 1998, ISO 27001/BS7799 Information Security Management System certification in 2004, ISO 20000 Service Management System certification in 2011, BS 10012 Personal Information Management System certification in 2012, and ISO 22301 Business Continuity Management System certification in 2020.
Market SurveillanceUpdate Date：2023/10
A healthy and orderly market should uphold investors’ rights and interests and prevent stock price manipulation and insider trading. In accordance with the “Taiwan Stock Exchange Corporation Rules Governing Implementation of the Stock Market Surveillance System” and the “Taiwan Stock Exchange Corporation Directions for Announcement or Notice of Attention to Trading Information and Dispositions”, the TWSE reminds investors of trading irregularities by publishing the said information in real time to maintain market integrity.
TWSE Securities Borrowing and Lending SystemUpdate Date：2023/10
In response to the needs of financial reform policies in Taiwan’s securities market, the Executive Yuan established the "Executive Yuan Financial Reform Task Force" in January 2002. According to the proposal of the task force: "Establishing a Securities Lending Center", on June 30, 2003, the TWSE launched its Securities Borrowing and Lending System (SBL), which established a platform for local and foreign institutional investors and funds to engage in securities lending activities. Lenders primarily include trust enterprises, insurance companies, and foreign institutional investors, while borrowers include securities firm lending accounts, securities broker-dealers, and foreign institutional investors. These institutions apply to the TWSE to undertake securities lending transactions that are either fixed-rate, competitive bid, or negotiated trades. For fixed-rate and competitive bid transactions, TWSE acts as central counterparty (CCP) for both the borrower and the lender. In this way, lenders can profit from their securities lending activity and at the same time meet trading, hedging, arbitrage, and settlement needs of borrowers, all of which help to advance the continued efficiency and liquidity of market transactions. More information about SBL can be found on the TWSE website at (https://www.twse.com.tw/en/page/products/sbl/edu.html).
Internationalization of Securities MarketUpdate Date：2023/10
Facing growing competition from securities markets around the world, the TWSE has systematically enhanced its connection and collaboration with peers, promoted the implementation of global standards in the local market, and actively participated in international securities organizations to advance Taiwan’s global image and standing.
The TWSE has signed Memorandums of Understanding with more than 30 foreign stock exchanges, and maintained steadfast bilateral or trilateral relationships with major exchanges. The cross-market cooperation covers product cross listings, indices co-compiling, regular visits between top executives, technical workshops, and joint marketing.
The TWSE maintains close relations with international securities organizations, such as the World Federation of Exchanges (“WFE”), Asian and Oceanian Stock Exchanges Federation (“AOSEF”), and International Organization of Securities Commissions (“IOSCO”). Through engagement in the annual meetings, working groups and activities of these organizations, the TWSE shares the insight and practices of the Taiwan capital market, thereby increasing Taiwan’s visibility and strengthen our links with the international market.
Furthermore, the TWSE holds investment forums every year as part of its efforts to augment and synergize Taiwan’s securities market. By organizing roadshows geared toward investors in global and regional financial centers, the TWSE continues to showcase the investment value of Taiwan-listed companies. The events serve as a platform for Taiwan companies to create multiple conversations with global investors, as well as an opportunity for the Exchange itself to foster interaction with key stakeholders in the global investing community.
In order to stay abreast of global indexing investment trends, the TWSE has signed cooperation agreements with foreign institutions, such as FTSE International Limited (FTSE) and Rayliant Global Advisors Limited (Rayliant) to co-compile indices with global standards and market needs to licensed index users to launch index-based products.
The TWSE, in cooperation with FTSE, has launched eight tradable indices since 2002, including the FTSE TWSE Taiwan 50 Index, the FTSE TWSE Taiwan Mid-Cap 100 Index, the FTSE TWSE Taiwan Technology Index, the FTSE TWSE Taiwan Dividend+ Index, the FTSE TWSE Taiwan Eight Industries Index, the FTSE TWSE RAFI Taiwan 50 Index, the FTSE TWSE RAFI Taiwan 100 Index and the FTSE TWSE Taiwan Shariah Index.
To promote corporate socially responsible investments, the TWSE cooperated with Rayliant starting in 2010, adopting Rayliant fundamental index methodology to co-compile the TWSE RA Taiwan Employment Creation 99 Index and the TWSE RAFI® Taiwan High Compensation 100 Index.
Starting in 2015, the TWSE began to produce a series of self-compiled indices in support of government policies and to meet market needs, including the TWSE Corporate Governance 100 Index, the TAIEX Leveraged and Inverse indices and the Electronics Leveraged and Inverse indices. As a result, the TWSE’s index series covers multi-type indices, including market capitalization weighted, industry-based, fundamentally weighted, and themed indices.
In light of the rapid development of indexing investment worldwide, the TWSE established the 100% owned subsidiary, Taiwan Index Plus Corporation (TIP). Since its official operation on March 14, 2016, TIP is entrusted by the TWSE to maintain, promote and license TWSE’s existing indices. The professional index company can effectively and rapidly respond to meet demands and enhance quality of index services.
Supervision and Service to Securities FirmsUpdate Date：2023/10
According to the Securities and Exchange Act, the establishment of a securities firm and its branches has to be approved and licensed in advance by the competent authority. Prior to participating in the securities market, a securities firm must sign a contract with the TWSE then make a prorated deposit into a settlement and clearing fund. The securities firm is responsible for its employees in both sales representation and ethical behavior when conducting centralized securities exchange market business.
To enhance their financial structure and risk management, all securities firms must meet capital adequacy ratio requirements in order to stay in business. The TWSE regularly assigns inspectors to check the securities brokers and dealers on-site to verify their business operations and financial status, as well as anti-money laundering and cyber security meet all requirements. In addition, the TWSE maintains an early warning system that helps scrutinize the operational risk of securities firms. This system also provides for a risk control database for margin trading in order to strengthen the risk management of securities firms.
Investors ServiceUpdate Date：2023/10
To provide investors with the latest information and knowledge of the stock market, the TWSE has organized the various websites, which include the TWSE’s official website, “Market Observation Post System”, “Market Information System”, ”Data E-Shop”, ”WebPro 3.0”, ”Investor Knowledge Network”, “Stay Home Learning”, the TWSE’s Facebook fan page and more. Besides, the TWSE has also organized the “Investor Personal Information Query System” website. Investors can enquire their account status and stock trading records online.
The TWSE has created a wide variety of promotional events to increase the general public’s financial knowledge. Currently, the TWSE’s campaign, based on the target audience preferences, can be divided into two major groups – teachers and students and the general public. For the former, the TWSE holds securities knowledge learning workshops for teachers, campus securities knowledge contest, and others. For the latter, the TWSE holds “Investing Your Future!” series seminars in community colleges, offers online prizes and quizzes and publishes educational comics and videos of securities investment. Except for the aforementioned events, to introduce the TWSE’s core business and the stock market infrastructure, the TWSE also arranges company visits for schools and other organizations and publishes introductive videos, on the “WebPro 3.0” website.
The TWSE makes every effort to disseminate financial knowledge. The objective is to make the securities market more easily accessible to the general public.
Securities InformationUpdate Date：2023/10
To enhance the fairness and efficiency of securities trading, the TWSE uses various channels such as websites and publications to give investors easy access to securities information.
The TWSE’s website ( https://www.twse.com.tw/en/ ) carries official announcements concerning securities listing and trading, as well as other securities information for investors’ reference. Investors on the move may access these apps through their mobile or smart devices. In addition, the TWSE’s home page provides links to the following websites:
- Market Information System (https://mis.twse.com.tw/stock/index.jsp?lang=en_us):
This website provides real-time trading information about the market and individual stocks, including Market Summary, Sector Group Quotes, Five Best Bids and Asks, Category Zone, Block Trade, Odd Lot Trade, SBL Inquiry, and Market Announcements.
- Market Observation Post System (https://emops.twse.com.tw):
This website provides financial and operational information about listed companies, including material information, company profiles, operational summaries, changes in the make-up of board of directors and supervisors, financial statements, announcements, derivative securities, corporate governance, e-books, funds, annual reports, and information on shareholders’ meetings.
- WebPro 3.0 Video Broadcast (https://webpro.twse.com.tw):
This website serves as a platform which focuses on the sharing of high-quality video content in the securities and futures market. It aims to enhance market transparency and bridge the link between other video and social media platforms. Three live channels are available, providing live broadcasts of investor conferences, earnings releases, press conferences of market sensitive information, listing ceremonies, investor educational activities, and other information. With advancements in technology, the TWSE seeks to provide a better and more secure viewing experience, as well as updating the latest content for essential video information on the securities market.
- Investor Education (https://investoredu.twse.com.tw/):
This website comprises information in a number of categories, including Beginner Investing, Investment Risk, Digital Box, and Investment Q&A. The content focuses on educational resources to equip investors with better investment knowledge as well as risk management concepts and examples. Various mediums such as video clips and e-books are available that give investors a better understanding of the products that the TWSE offers and how to trade these financial instruments.
- Corporate Governance Center Website (https://cgc.twse.com.tw/frontEN):
This website is the TWSE’s one-stop service window to all things related to corporate governance and corporate social responsibility among TWSE’s listed company community, including Taiwan’s related rules and regulations, evaluation metrics and published results, latest news, promotional events, publications, and database of statistics. The integration of CG-related information makes this website the most important platform for online queries into Taiwan’s corporate governance and corporate social responsibility.
- Data E-Shop (https://eshop.twse.com.tw/en/):
This website provides data vendors, institutional investors and general public with on-line subscriptions to data services, including end-of-day market statistics, index constituents and historical trading data, which can conveniently be viewed or downloaded in a variety of formats.
- Investment InfoHub – The Taiwan Markets Dashboard (https://www.twse.com.tw/IIH/en/index):
This platform integrates important investment information from the TWSE official website, market observation post system, and market information system. To better serve investors, it not only offers an all-in-one data platform but also provides visualized analytical tools, multiple file export options, and ensures consistent formatting in both Chinese and English.
In addition to providing investors with versatile reference data, the TWSE also puts out the periodicals. To inform and educate investors, the TWSE has compiled a series of booklets. Investors can access these on TWSE’s website (https://www.twse.com.tw/en/).
To bring the public closer to the stock market, the TWSE set up an Information Center in 2008. The Center provides the following information:
- Market data displays such as trading graphs, international stock market data, foreign exchange rates, and trade data displays;
- Multimedia information such as those introducing TWSE operations, services and promotional videos; and
- Live broadcasts of ceremonies and speeches (which can be accessed through WebPro 3.0 Video Broadcast).
Rules and Regulations DirectoryUpdate Date：2023/10
Introduced in 2014, the Rules and Regulations Directory allows the public to search and access rules and regulations regarding listing, trading, and supervision in Taiwan’s securities market. Investors also appreciate the friendly layout design, the diversified ways to search and its complete English version.
Currently both mobile and desktop versions are available, which can satisfy the User's need to search for regulations by using various browsing devices. Users can search by keyword, category, or news release for easy access to content. Amendments and historical versions of the rules and regulations are also provided for comparison and research purposes.